A Reuters article (2021) reported that the U.S. Securities and Exchange Commission (SEC) opened an investigation into how Wall Street Banks documented and tracked digital communications among their employees.
Reuters exposes that, despite the U.S. SEC and the Financial Industry Regulatory Authority requiring broker-dealers to record all digital communications related to banking operations to prevent a limitation on potential investigations or ensure good practice, the adoption of teleworking that was forced by the pandemic of COVID-19 meant the proliferation of online communication and messaging platforms, and the use of emails, social networks or WhatsApp on personal devices to communicate issues related to working development, which poses a problem to carry out the documentation of these communications, as acknowledged by the U.S. SEC’s chief compliance officer, Gubit Grewal, according to Reuters.
Moreover, in the event of an investigation, it is unclear in the U.S. how far the requirements to review personal devices can go to obtain communications between employees without interfering with or violating their privacy.
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Issues to address in employee-to-employee communications
Therefore, Wall Street banks and broker-dealers need to take action to ensure compliance with U.S. SEC and Financial Industry Regulatory Authority requirements and develop an action plan to address the current situation and take measures to address it:
- Omnichannel communication.
- The use of personal devices for business communications.
- The use of mobile lines over fixed lines.
- The lack of infrastructure for recording and documenting communications.
- Ensuring ethical and transparent performance.
Software for recording and registering internal communications.
In the work of documenting and monitoring communications between employees and transparent performance of the activity, it is advisable to adopt recording software whose infrastructure and activity is developed in the cloud, since the security provided by cloud services is superior, due to the restrictions and access control.
The use of communications recording software, such as Recordia, which addresses the problem of the diversity of communication platforms and the challenges posed by the documentation of these communications for financial institutions, also it ensures total data encryption and offers the possibility of performing back-ups in case of investigation or requirement.
Recommended best practices
In addition to implementing recording software, not only is it necessary to provide secure communication platforms whose transmissions can be recorded, but also a change in corporate culture on the part of brokers and Wall Street banks, here are some of our recommendations:
- Limit the use of personal devices, emails and personal social networks, in addition to instant communication platforms such as WhatsApp or Telegram.
- Provision and promotion of internal digital communication platforms to employees that are instant and convenient and are adapted to both on-site and telecommuting that encourage their use.
- Implementing a culture of awareness of the importance of transparent and ethical communication, as well as a full understanding of the cybersecurity and non-compliance implications.
How Recordia complies with U.S. SEC and Financial Industry Regulatory Authority regulations
Recordia is a service that allows companies to record and store omnichannel communications such as landline, mobile, email, fax, SMS, or legally and ethically important Microsoft Teams calls in a secure and scalable environment for a specified period.
In addition, in case employees need to use smartphones, Recordia has the RTS service, to train employees with cell phone lines, also called softphones, whose calls are also captured in Recordia. It should be noted that, for communications that are not interested in being recorded due to their nature or privacy, the Record on Demand (ROD) service can be enabled, which records on demand, that is, authorized personnel can stop the recording at a given time for legitimate reasons.
Recordia allows access to these records or to make a backup with the possibility of being provided later as evidence or for their elimination if requested, complying with international data protection regulations and guaranteeing an ethical and responsible use of them, thus responding to the problem exposed by Gubit Grewal and to the requirement of keeping a record of communications at work.
If you want to know more about Recordia and how it can help you comply with the U.S. SEC and the Financial Industry Regulatory Authority, click here.